Donald Tsang

Bank chairman denies knowledge of SEC deal

PUBLISHED : Tuesday, 29 January, 2008, 12:00am
UPDATED : Tuesday, 29 January, 2008, 12:00am

Bank of East Asia chairman and chief executive David Li Kwok-po said he had no knowledge of a report yesterday claiming he had reached a tentative agreement with US regulators to pay more than US$8 million to settle insider-trading allegations.

'I have no knowledge about the reported settlement,' Mr Li told the South China Morning Post last night in a telephone interview.

'I have put the case to the lawyers and they told me not make any comment to you or any other media about the allegations.'

Mr Li, a member of Chief Executive Donald Tsang Yam-keung's cabinet and a director of several Hong Kong-listed companies including SCMP Group, publisher of the Post, is now in the Middle East with Mr Tsang drumming up Muslim investor interest in Hong Kong.

It has been 'business as usual' for Mr Li since he received a so-called Wells Notice from the US Securities and Exchanges Commission in July last year.

The notice informed the 68-year old banker and legislator for the financial sector that investigators planned to recommend legal action against him for insider trading ahead of News Corporation's bid for Dow Jones. Official suspicions were initially raised when a Hong Kong couple, Wong Kan-king and Charlotte Wong Leung Ka-on, bought a US$15 million stake in Dow Jones more than three weeks before an announcement that News Corp chairman Rupert Murdoch had approached the board of Dow Jones with a plan to buy the New York-based publisher of The Wall Street Journal.

Mr Li was on the board of Dow Jones till mid-December and is a friend of Mrs Wong's father, Michael Leung Kai-hung.

Mr Li was reported to be willing to pay US$8 million, a sum similar to the profit understood to have been reaped by the Wong couple, to the SEC while neither admitting nor denying any wrongdoing, a Financial Times report said citing sources familiar with the probe.

The report said the details may change before a settlement is approved by SEC commissioners. Last night, commission spokesman John Nester said: 'We are not commenting.'

Last week, the South China Morning Post reported Mr Nester had confirmed that the case against Mr Li and the insider-trading case against the Wongs had been postponed.